South Indian Bank: We expect SIB’s profitability to improve slightly on the back of better NII which will support margins, while provisions will be comparatively lower in Q4FY16. Core revenues have been weak for past few quarters on tepid loan growth, especially high yielding gold loan book which has seen high de‐growth, but de‐growth has slowed down and expect overall advances growth of 10% YoY in Q4. We expect asset quality to be stable with lower slippages.
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State Bank of India:We expect PAT growth to be under pressure as bank has guided for higher slippages in Q4FY16 mainly from AQR assets which will keep credit cost high ~200‐230bps (annualized) and witness higher interest reversals impacting margins, but we expect opex will be under control. Loan growth has picked‐up and we expect it to be at ~11‐ 12% YoY. We will watch for guidance on 5:25/SDR assets and provisioning on it.